Case Law Details
DCIT Vs Madhu Developers (ITAT Mumbai)
Introduction: The case of DCIT Vs. Madhu Developers, currently under scrutiny by the ITAT Mumbai, revolves around the application of Section 69A of the Income Tax Act. The dispute arises from the alleged failure of the assessee to provide complete details of cash receipts, leading to conflicting interpretations of the nature and source of undisclosed income. This article delves into the facts, arguments, and the recent order dated 28/11/2023.
Detailed Analysis: The Assessing Officer treated an amount of Rs. 2,26,00,000/- as unexplained income under Section 69A during a survey at Madhu Developers’ premises. The firm, engaged in a real estate project, admitted to the undisclosed income from the sale of flats. While the Ld. CIT(A) deleted the addition, the Revenue contested this decision.
The core debate centers on Section 69A, which necessitates the assessee to explain both the nature and source of unrecorded income. In this case, the appellant clarified the nature as business receipt but failed to specify the source – the particular sale of the flat from which the amount was received.
The Ld. DR argued that Section 69A aims to bring both legs of a transaction to tax, emphasizing the need for detailed information on the source. The appellant’s admission of undisclosed income during the survey was considered insufficient without specifying the flat’s sale.
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